https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=52254 https://www.taxtmi.com/caselaws?id=52254 Validity of Show Cause Notice - Modvat credit of duty paid on the inputs - Demand - Clubbing of clearances - Dummy units - mandatory penalty - interest u/s 11AB - manufacture of finished product cleared - difference between the Members. Whether the order proposed by learned Member (Technical) rejecting the appeal on merits but reducing the penalties or whether the order passed by Member (Judicial) allowing the appeal in respect of clubbing of clearances with the clearances of M/s. Reliable Corpn. and remanding the matter for the purposes of clubbing the clearances with the clearances of M/s. Abbas Co. is correct. HELD THAT:- From the record it is clear that, the SCN does not spell out the allegations correctly and M/s. RC and M/s. Abbas Co. have not been put to notice on the point of clubbing of clearance with separate reasons. Hence, I agree with the finding of Member (J) on non-issue of SCN. Further, it was explained by the learned Senior Advocate that if at all there was any discrepancy, it could have been in the form of clandestine removals but even no allegations have been brought out in that regard. He pointed out that at the time of the raid on the premises of M/s. RC, the department had not found out any excess production or any other documents being not properly maintained. There was no shortage of material also to allege clandestine removal. In that view of the matter, I am inclined to agree with learned Member (Judicial) on the point of merits as arrived by Member (J) in her considered order. In paras 19 to 21, learned Member (Judicial) has also examined the other points which have been taken by the Revenue to allege mutual flow of funds. I have gone through the order and I agree with the said findings. In so far as the allegation of suppression is concerned , it was argued by learned DR that the Commissioner has given a detailed finding on suppression and that should be upheld, while the Sr. Counsel argued that both the units after crossing the limit as per the notification were paying duty and their records were being scrutinized and the department have not found any discrepancy in respect of same. Insofar as the charge of clubbing of clearances of M/s. Abbas Co. with the clearances of M/s. PR, the learned Member (Technical) has confirmed the demand and has held that the clearances of M/s. Abbas Co. are to be clubbed with M/s. PR, while Member (J) has remanded the matter for de novo consideration. I am inclined to hold that demands are not to be confirmed for the reason that M/s. Abbas Co. has not been put to notice on the ground that their clearances are required to be clubbed with the clearances of M/s. PR. The show cause notice confines itself to M/s. PR RC. The same, finding as given with regard to show cause notice would apply to the facts of M/s. Abbas Co. However, as a third Member, I cannot choose to give an independent order other than the one proposed in the points of difference. As the learned Member (Judicial) has remanded the matter for de novo consideration, I am inclined to accept the view for remanding the matter. However, the Commissioner shall take into consideration the findings recorded by the majority in this order on the point pertaining to show cause notice being bad in law and other points noted in the majority order. MAJORITY ORDER - In the light of the majority view, it is held that the clearance of M/s. Reliable Corporation are not to be clubbed with the clearances of M/s. Poly Resins. Longer period of limitation also cannot be invoked in this case for demand of duty. As regards question of clubbing of clearances of M/s. PR with the clearances of M/s. Abbas and Co., in the matter is remanded to the Commissioner for decision. Penalties imposed are also set aside. Case-Laws Central Excise Fri, 22 Aug 2003 00:00:00 +0530